MPs quiz Alistair Darling about the budget - as it happened

• Chancellor tells committee that
today's rise in GDP shows his stimulus plans are working
• But MPs demand to know how many jobs will be lost due to rise in national insurance
• Call for more honesty over 'efficiency savings'

9.47am: And we're off. After a preamble from Darling about the state of the economy (fragile), committee chairman John McFall begins by asking Darling has he made any progress in his push to clamp down on systemic risk?

Darling reckons that we're making some progress in getting international agreement for a tax on the financial sector

"I'm more optimistic that we can get a global bank tax than six months ago."

Last night his rival, George Osborne, said the time was right for a tax on the banks. Darling, though, is still cautious about going it alone - warning this could scare banks out of the City.

"If that happens we lose the employment, we lose the revenues, someone else picks them up and we lose both ways."

9.53am: Mark Todd, Labour MP, questions whether the Treasury is doing enough to rebuild the economy on a more solid footing - with less reliance on City tax revenue.

The chancellor has the grace to look a little bashful. "All of us should be more bothered about other people's jobs."

Analysts forecast wide-ranging reductions in employment in the public sector over the next few years, and Darling attempts to paint himself as the reluctant cutter.

"I part company with those who would wield the machete, almost as a matter of principle."

10.15am: Andy Love, Labour MP for Edmonton, demands to know why Britain's struggling manufacturers aren't exporting more goods overseas, given that sterling has dropped by around 25% during Darling's time in the Treasury.

Darling insists that the weak pound has "certainly helped" exports, but questions whether exporters have cut their prices enough - saying they should "get their foot in the door" while the pound is weak.

He also puts a lot of the blame over the English Channel. "Sixty percent of our exports are to Europe, and growth there has been flat."

10.23am: All of a sudden, Darling's on the ropes and being pummelled by Michael Fallon, the ever-impressive deputy chair of the committee (and Conservative MP for Sevenoaks). Fallon asks how many jobs will be lost because of the chancellor's plan to raise national insurance rates.

Darling assures the committee that the Treasury took the impact of the NI changes on employment into account. "So, what is it?", inquires Fallon. "It's built into the forecasts," straight-bats the chancellor. Excellent, responds Fallon, but what?

Like a pro, Darling follows the line that if you're in trouble you turn to your civil service advisors. Dave Ramsden (chief economic advisor) directs everyone's attention to Box C2, on page 198 of the Red Book.

Fallon won't be shaken off. Said box doesn't include a specific forecast for the impact of the NI rise. "You're being evasive," he challenges Darling. Not at all, the chancellor replies. There's a "manageable impact."

A negative impact? Darling seems to answer the question without actually, erm, answering the question.

The discussion continues for a bit longer, neither side getting much further, in truth. We'll have to wait and see.

10.35am: The mood in the room is turning increasingly tense as another Conservative MP, Andrew Tyrie MP, tries to nail Darling. This time he asks about the government's plan to make efficiency savings of between £15bn and £20bn, annually, in the NHS during the next parliament. Will the public really believe that this can be achieved without major pain and loss of services?

Apparently you will. Given the NHS's huge budget (over £100bn), it's "plausible" to squeeze these large efficiency savings.

Tyrie then turns to last night's Chancellors' Debate, and the question of whether the next government will make public sector cuts "faster and deeper than Thatcher", whoever wins the election.

This sparks another bout of evasiveness, with Darling saying that he told the BBC last week that the next spending review will be the toughest for decades. Tyrie presses him on the point, and is accused of having an "understandable fascination with Mrs Thatcher" (curious phrase).

Darling again plays the compassionate cutter card, saying it is possible to cut spending without damaging "the fabric of society." Tyrie wants more details, and is accused of "pointlessly dancing on the head of a pin." "I think it's you, chancellor, who is dancing," he grins back.

All this, and the general election's not even been called yet.

10.45am: Onto George Osborne's commitment to reverse some of Darling's national insurance rise, paid for by £6bn of new efficiency savings. Sally Keeble, Labour MP for Northampton North, gives Darling a softer question - are these extra efficiency savings achievable?

Darling says it's unlikely (no surprise there, sorry), but he does also provide a bit of detail. One plank of the Conservative plan is to consolidate public sector offices, freeing up space and selling off or closing down surplus property. Apparently that's already in the Treasury plans, as is clamping down on underperforming IT projects.

"There's a danger of double-counting," he warns.

10.51am: John Thurso, Liberal Democrat MP for Caithness, Sutherland and Easter Ross, also probes the government's plans for efficiency savings. He points out that the National Audit Office hasn't signed off the last tranche of efficiency savings claimed by the government - is it really wise to promise more?

Darling insists that this is no time to hang around. "We need to keep setting demanding targets, and they're achievable." Given the size of the public sector spending bill, shaving £20bn through efficiency savings is definitely achievable.

Thurso, though, demands a bit more honesty. Efficency savings just mean cuts, right? "Isn't the country grown up enough to take this on board?"

Darling (who looks rather happier to be facing anyone other than Fallon, who is instead treating the chancellor to a steely glare), insists there is a distinction.

"What matters to people is the outcome - seeing a specialist within two weeks if they think they have cancer."

Given that the NHS is ringfenced under Labour's plans, that shouldn't change, he says. Different than shutting the SureStart programme, which "some people might be planning, but I'm not."

11.09am: Now the committee wants to know why Royal Bank of Scotland and Lloyds Banking Group have not been lending more to small businesses and the public, despite now being partly owned by the taxpayer.

Darling denies that the banks are failing on their commitments, saying they hit targets at the gross lending level but not the net level, as people have been paying off their debts. Which raises the issue of why the money wasn't pushed back into the market more quickly.....

Many MPs have reported a surge in complaints from small companies who have been turned down for loans. The chancellor acknowledges that he has seen this for himself. He even reveals that: "Sometimes in my own constituency I have been able to persuade the bank to take a different view."

So, if you're running a company in Edinburgh South West and you can't get a loan, you know what to do.

Nick Ainger, Labour MP for Carmarthen West and South Pembrokeshire, wants to know what will happen if Lloyds and RBS just defy the government's targets. They'll be hit in the pocket, Darling pledges, pointing out the banks' remuneration committee must take these targets into account.

However... Darling also argues that business people need to be realistic about bank lending. The bad old days of HBOS making reckless loans to property firms are over.

He cites the example of a developer who was furious that his bank would not lend the money to build a second block of flats, because he had not managed to let out the first block.

"In the end he conceded that the bank had a point."

11.22am: Why is the UK's contribution to the European Union going up by £4.5bn, asks Graham Brady.

Darling responds that we have a commitment to support smaller members of the EU (which he clearly thinks is a good thing). There's also the matter of the mammoth Common Agricultural Policy (which he clearly doesn't, but admits that other European countries are understandably reluctant to reform it).

Anyway, Europe is our biggest trading partner "by far", so it's money well spent. Brady then asks how much of this extra money is caused by Britain recently giving up its rebate - Darling is going to go away and get an answer.

11.29am: John McFall ends the session by thanking Darling for attending his final meeting of the parliament, and adds a rather touching tribute - saying how grateful he was that the chancellor always attended committee hearings when asked and was generally a pleasure to work with.

"On a personal level, the committee wishes you well," says McFall, in a rare show of end-of-term bonhomie.